HMN

Contrasting Insider Moves at Horace Mann Educators ($HMN): Director Buys $154K While CEO Continues Selling

05/22/2025 16:17

An intriguing insider trading pattern is unfolding at educator-focused insurer Horace Mann Educators ($HMN), where Director Victor Fetter recently purchased shares worth approximately $154,000, while other executives including the CEO have been consistently selling stock for months. On May 20th, Director Victor Fetter acquired 3,500 shares at roughly $44 per share, totaling $154,105. This represents the only insider purchase at $HMN this year and stands in stark contrast to the consistent selling pattern demonstrated by other company officials. Meanwhile, CEO Marita Zuraitis has been steadily divesting shares since October 2024. Most recently, she sold 5,000 shares at around $41.40 on May 1st, amounting to $207,000. Notably, most of Zuraitis's transactions were pre-planned sales under Rule 10b5-1 trading plans, which were adopted in March and November 2024. These plans allow insiders to establish predetermined trading schedules to avoid accusations of trading on inside information. Other executives have followed similar selling patterns. Officer Donald Carley sold 5,000 shares at $43.93 on May 19th, totaling $219,650. November 2024 saw even more active insider selling, with Officer Bret Conklin and SVP Kimberly Johnson also offloading substantial positions. These insider transactions become particularly interesting when considered alongside $HMN's stock performance. The company's shares have seen significant appreciation over the past six months, including a sharp jump from around $32 to $41 in early November 2024. Currently trading above $43, the stock has gained approximately 31% year-over-year, substantially outperforming the S&P 500's roughly 10.5% return during the same period. Horace Mann's financial performance supports this stock strength. The company reported better-than-expected results for Q1 2025, with earnings per share (EPS) of $1.07 exceeding analyst expectations of $0.97 and representing a 78% increase from $0.60 in the same quarter last year. Revenue grew by 7.9% year-over-year to $416.40 million. Additionally, the company recently authorized a $50 million share repurchase program and maintains a quarterly dividend of $0.35 per share (annual $1.40, yielding approximately 3.25%), demonstrating its commitment to shareholder value creation. Horace Mann focuses on a niche market providing tailored insurance and financial services for educators. The company operates through three main business segments—Property & Casualty Insurance, Life & Retirement, and Supplemental & Group Benefits—serving educators across the United States. At its Investor Day event held on May 13, 2025, the company highlighted its growth strategy and strengths in the educator market. An important consideration for investors is what the recent insider trading pattern says about the company's long-term outlook. Fetter's purchase could be seen as a positive signal, indicating confidence in the company's value at current price levels. However, the consistent selling by the CEO and other executives might raise caution among some investors. That said, given that most of these sales were pre-planned, they don't necessarily reflect negative views on the company's fundamental performance or prospects. Rule 10b5-1 plans are often established for various reasons including personal wealth management, diversification, or tax planning. Moreover, Horace Mann's recent financial performance and stock strength suggest the company is moving in the right direction. The company projects full-year 2025 EPS between $3.85 and $4.15, above analyst expectations of $3.78. Horace Mann's stock trades at approximately 15.6 times earnings, below the market average. Additionally, its price-to-book ratio of 1.31 is lower than the industry average of about 2.3, suggesting relative undervaluation. Industry analysts maintain generally positive views on $HMN, with Zacks assigning a Strong Buy rating and an 'A' grade for value. Analysts' median 12-month price target stands at $45, implying about 4% upside from current levels. Investors should watch for additional insider trading patterns and Q2 2025 earnings in the coming months. In particular, it will be worth noting whether Fetter's purchase is followed by other insiders or if the selling pattern continues. Broader market factors such as trade tensions and interest rate environment changes could also impact $HMN's performance. Horace Mann Educators maintains a competitive advantage through its deep understanding of the educator market and tailored products, which remains crucial for the company's continued success. Considering the current insider trading patterns, strong financial performance, and reasonable valuation, $HMN remains an attractive option for income-focused investors.

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